Any employer who has borne the costs of workers' comp injuries knows only too well the financial impact that accidents and injuries can have on individual businesses. However, as steep as direct and indirect costs employers pay out for workers' comp claims are, they pale in comparison to the financial impact these injuries can have on workers and their families, according to a June 2015 report published by OSHA.
While most employers – and people in general – assume that the workers' compensation system insulates injured employees from financial harm caused by on-the-job injuries, according to OSHA, that simply is not so. In fact, their report shows that only 21 percent of the total costs of injury are paid by workers' comp, as compared to the 50 percent that is paid out-of-pocket by injured employees and their families. The remaining 29 percent is covered by private health insurance and taxpayers, via state and federal government programs. Additionally, OSHA points out that, on top of paying the lion's share of injury costs, workers suffer pay reductions of 15 percent for 10 years after a workplace injury, another harsh financial hit, as well as the physical and emotional effects of the injury.
What this all means is that preventing workplace injuries via effective, research-based workplace safety measures – like physical abilities testing – does not just pay off for your company. Going the extra mile in preventing workplace injuries also benefits your workers in many ways, including these 5 key benefits:
- Fewer workers will deplete family savings to cover injury costs, preserving retirement savings, kids' college funds, and general financial security
- Reduced risk of lost work time and short and long-term income reduction caused by workplace injury
- Fewer workplace injuries means less risk of permanent disability for your workers
- Preventing workplace injuries ensures that fewer workers and families will feel the physical and emotional effects inflicted by serious injuries
- Fewer workers and families will be subjected to the social ramifications of financial hardships caused by injury, such as dependence on state, federal aid programs, or decreased living standards
In addition to benefiting workers, preventing workplace injuries also generates substantial benefits for taxpayers – which, of course, includes you, your company, and your employees – lowering your contribution to worker injury expenses subsidized by taxpayer-supported safety net programs. According to OSHA, those costs were an estimated $33 billion for just two programs alone – SSDI and Medicare. Workplace injuries inflict a large toll on the overall economy as well, racking up costs of $198 billion in 2012 alone – money that could have been much better spent boosting our still-sluggish economy.
All-in-all, injury prevention is an investment that produces great returns for everyone: your company, your workers, their families, taxpayers, and society as a whole.